Waciye. Good afternoon. My name is Shannin Metatawabin. I'm the chief executive officer of the National Aboriginal Capital Corporations Association. I'm also a member of the Fort Albany First Nation of the Mushkegowuk Nation in James Bay. I am joined today by my board chair, Andrew Leach, who is also the board chair for the Tale’awtxw Aboriginal Capital Corporation, TACC, and a member of the St’át’imc Nation.
I would like to thank you for the invitation to speak today regarding an important study on the support for indigenous Canadians in the agriculture and agri-food industry.
Before I get into my remarks, I'd like to acknowledge we are on the unceded territory of the Algonquin people.
The National Aboriginal Capital Corporations Association, commonly known as NACCA, is a representative organization of 59 aboriginal capital corporations or aboriginal financial institutions across Canada. They provide developmental lending to hundreds of indigenous entrepreneurs of first nations, Métis and Inuit heritage.
NACCA is also a program delivery partner with Indigenous Services Canada and administers the delivery of the aboriginal business financing program on behalf of the Government of Canada.
Aboriginal financial institutions are an incredible success story. During a 30-year program partnership with the government, aboriginal financial institutions, with the help of modest federal subsidies, have provided over 45,000 loans totalling $2.5 billion to first nations, Inuit and Métis owned businesses. Of special note, they started with $240 million and recycled it 11 times.
Each year, aboriginal financial institutions provide over $100 million in loans to 500 indigenous-owned start-ups and 750 existing businesses. Aboriginal financial institutions have a current aggregate loan portfolio of $329 million.
Indigenous businesses are a key driver of employment, wealth creation and better socio-economic outcomes for indigenous people in Canada.
Aboriginal financial institutions have also been very active in the indigenous agriculture and agri-food sector. In fact, five aboriginal financial institutions were capitalized specifically to support this business sector alone.
In 2017-18, 8.9% of the businesses that received a loan from our network were in the agricultural sector. This has accounted for about $3 million in lending activity and delivers broad socio-economic results.
The committee has heard from previous witnesses about the many challenges and opportunities associated with indigenous participation in the agriculture and agri-food sector. You heard about what is perhaps the most profound challenge: food security in indigenous communities, particularly in remote communities. This is a national crisis and must be addressed.
The committee has also heard about the growing opportunities in indigenous agriculture and agri-food. Chief Byron Louis described many indigenous success stories in farming, agriculture and other sectors. The committee has also heard about many of the unique challenges facing indigenous agriculture and agri-food: Indian Act impediments, land tenure on reserve, remoteness, poor socio-economic conditions and low rates of educational achievement, among others.
Many of these challenges contribute to what I would argue is the greatest impediment to growing this sector: access to capital. Conventional lenders and investors are not willing, or are unable, to provide the capital needed to finance businesses in indigenous communities. It is our view that the success of NACCA has been predicated on the fact that we are, and we represent indigenous institutions developing solutions with and for indigenous people. Further, it is our view that Canada should continue to build on the best practices, and the institutional supports and successful partnerships that currently exist today.
With these comments in mind, we have three recommendations for your committee.
First, there should be additional public investments for aboriginal financial institutions. Since the 1990s, opportunities for indigenous businesses have changed significantly. The number of indigenous businesses is growing exponentially as a result of new opportunities, demographics and demonstrated success, yet in the last 20 years, annual federal funding has actually decreased by 58% on a dollar value and 72% by value. Notably in this context, agriculture-specific programming and supported advisory services to indigenous farmers was cut completely in 2014.
Current loan capital and program resources do not allow financial institutions to respond to the growing interest in business development, including the agricultural and agri-food sector. Some 40% of our aboriginal financial institutions are fully loaned out. They're waiting for loans to be repaid before they can issue new ones. There is insufficient capital to respond to the needs of indigenous businesses.
NACCA has submitted a business case to the Government of Canada to seek $67 million a year to support existing aboriginal economic programs, business support, which would be a new program, and our institution. The main driver of that business case would be to create a growth fund that would provide perpetual growth for the aboriginal financial institutions to access capital by raising private sector capital.
The second recommendation is that Agriculture and Agri-Food Canada should partner with NACCA. You heard from Agriculture and Agri-Food Canada officials on their efforts to engage in business communities. We can help. We propose that Agriculture and Agri-Food Canada consider partnering with NACCA to deliver its financing and business support services. NACCA is already the program delivery partner for lndigenous Services Canada. We can build on that knowledge, experience and success, and, of course, on our relationship with our own businesses and communities. By partnering, we would build on what Minister Morneau stated in his budget speech in 2017: “We know that strong partnerships between the federal government and indigenous communities are crucial for our success.”
The third recommendation is that more flexibility is needed in existing terms and conditions. The committee heard previous witnesses describe the challenges faced by indigenous businesses when applying to programs administered by Agriculture and Agri-Food Canada. This has also been the experience of many of our business clients. A program delivery partnership between Agriculture and Agri-Food Canada and NACCA would help address these impediments in program design and delivery. NACCA has a proven track record of successfully meeting the requirements and responsibilities of accountable program delivery while meeting the needs of our clients.
I would like to conclude with the following: Aboriginal financial institutions have an enviable record of success supporting indigenous businesses across Canada, including in the agriculture and agri-food sector. However, our ability to help is limited by our funding from government. We are proud of our success, but with the resources we have, we can only do so much. It will be indigenous people who will find the solutions to the challenges instead of relying on the government and corporate Canada. Healthy indigenous businesses will be able to construct container farms, install their own community freezers, and grow their own self-sufficiency and local economies. Additional funding and new partnerships with existing programs, like Agriculture and Agri-Food Canada, would result in the creation and growth of so many more businesses.
Meegwetch. Thank you.